What is Management and How Does it Define Organizations?

What is management? As the consumer market grows, develops and evolves, so do the companies and brands that caters to it. Operations, protocols, products, strategy — every aspect of the way business is done is in a constant state of flux. Part of the way many companies and brands push that innovation and evolution is through management — the way it handles people and the tasks these people are meant to do.

Management basics

What is management? In a nutshell, it’s all about planning, organizing, directing and controlling, and the application of certain principles in order to utilize and maximize an organization’s human, informational and financial resources to meet the company’s mission and goals.

Investopedia defines operations management as “the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization. Operations management teams attempt to balance costs with revenue to achieve the highest net operating profit possible.”

Some key words in that definition are “administration,” “highest level of efficiency possible,” “maximize profit,” and “balance costs with revenue”. That just goes to show how tricky management really is. It’s not just ordering people around or doing paperwork.

Management determines the company strategy and direction. Good management is the bedrock on which successful businesses are built. Contrary to the belief that all one needs is a good product, a brand with a good product will quickly find itself in dire straits if things are mismanaged. The more complex the operation of a company, the more important good and efficient management is.

History

What is management’s history? Management as we know it today began to be roughly practiced during the Industrial Revolution. Before that time, it was largely business owners who did all the work. Although philosopher Adam Smith proposed that production could be increased through the division of labor. The Industrial Revolution ushered in a boost in production scale — as such, labor could not be done by one or a small group of people. In order for mass production to be possible, the concept of management came into existence.

Back then, this meant labor specialization, standardization of processes, quality control, planning and organization of workflow, and even early accounting were conceptualized. The term “management” became a widely used term in the early 1900’s. As such, this also meant the creation of schools and curriculums devoted to management. In fact, the prestigious Wharton School was established in 1881, as the concept of management became more solid and integral part of business culture and the business environment.

After this came the period that put the emphasis on expertise. Military culture, mathematical and scientific ideas, and concepts from other fields like sociology and psychology, became the basis of a number of concepts and practices in management. This was also the time when workers were seen as more than just drones or cogs in production — this meant that workers who were taught, and were capable of utilizing information provided more value to an organization. This meant also that management concepts became more than just “follow the leader”, but now also put value on engaging and motivating workers and employees.

By extension, the emphasis on a worker’s expertise, as well as the value he or she provides has led to management adding another dimension — that of empathy. This means connecting with members of the organization in a more emotional, memorable, and even personal level. By extension, a brand’s engagement with customers now also should have that emotional / empathic connection. This also means that companies are now called on to not just be concerned with profits and the bottom line, but to create a management strategy that promotes equality and treats all individuals and groups with dignity.

Types of management

Now, let’s look at the different types of management:

Autocratic

The bane of employees. The emphasis here is one authority, rank, and hierarchy within the organization. It is always a top-down interaction, with rank-and-file largely required to simply follow commands. Employees who fail to obey are punished. In addition, the management style relies on fear to keep everyone in line and to keep things going.

Production may be high, but employee satisfaction is not. Another downside would be a possible dip in quality, as workers will not be motivated to give 100%. Micromanagers also usually fall into this category, as they will keep hovering over everyone’s shoulders, expected tasks do be done ONLY as they instructed. Management guru Steve Denning, in a Forbesarticle accurately describes this sort of style — “’focus on making money’, ‘tell employees what to do’, ‘control performance through rules, roles, plans and reports’ and ‘achieve efficiency through economies of scale’.

Extroverted

A more agreeable (at least among workers) management style would be an extroverted one, where managers exercise more consideration, compassion, and understanding towards employees. Some famous names who were seen to practice this kind of management style were the late Apple CEO Steve Jobs, and Tesla CEO Elon Musk — who largely rely on their strong charisma to lead and manage people. Transformation managers — those who take the mindset of quid-pro-quo between manager and employee also fall into this category. Other ways extroverted management would be the use of rewards and incentives, as well as a supportive/coaching role. There are also situations where there is no clear or at least no enforced hierarchy, where workers are supposed to operate on equal terms and everyone’s input is valued the same way.

Political

Sort of a combination of an authoritarian and extroverted style of management. As a whole, managers only appear to be sympathetic, and/or have hidden agendas not disclosed to regular workers. Managers who operate on a “need-to-know” basis when it comes to subordinates fall into this category. Also, as the name suggests, this kind of style incorporates office politics into the power play, where individual career ladders are more the priority instead of productivity or profit for the company.

Administrative

This can be seen as a derivation of the authoritative style of management, but not entirely. While the emphasis on this style is the strict adherence of company rules, protocols and processes, these are not necessarily to the detriment of the worker. The point in this kind of management style is the “If it’s not broken, why fix it?” mindset, where things will be done the way they’ve always been done.

Democratic

Here, everyone’s voice is heard. This results in high satisfaction among workers, but if left out of hand, this type of management can be counterproductive or even have a negative impact on the organization as a whole. But the goal in this kind of managerial style is to deliberately encourage the participation of all (or at least the majority) of the members of the organization, acknowledging that only management is capable of generating good ideas.

Laissez-faire

By far, the most laid-back of all styles, where workers are under minimal supervision and are given the creative freedom to work how and (and even when) they see fit, as long as preset deadlines and goals are met. The emphasis here is more on the completion of projects and the final outputs. There is also a great deal of trust placed on members of the organization to meet goals and expectations.

Coaching / guiding

Here, management has its ear more kept to the ground, listening for any issues. It’s less on the “my way or the highway”, but more like workers are being taught and guided. Management is fluid, and plays by ear, depending on input from workers. The major difference here from the democratic style is the approach management takes, because under a democratic style, in the end, there needs to be a single decision-maker. In coaching, there isn’t any set way, with management taking on the role of providing members of the organization with many alternatives to meet the same goal. An article from Grace College also calls this management style, “Management by walking around”.

What is management today and how it continues to evolve

There really is no right, simple or single management style that works — it will depend on the kind of organization, as well as the current situation, to determine what kind of management style is appropriate. While many companies already have a preset culture, management can change the way it oversees the organization if the circumstances call for it.

Today, another factor — technology now also plays a big part of how management is done and practiced. With more and more processes incorporating technologies like artificial intelligence and automation, management strategies also change to cope with the developments. Technology now also provides various tools to help in the management process and is now directly related to ease and efficiency with which an organization goes around with its business. Certain tools can enhance and ease communication between members of the organization, making management more efficient and effective. Other technologies can also make task tracking easier, making managers much more effective at identifying any possible problem areas and stepping in before mistakes are made.

An example of revolutionary management tools and technologies are the ones provided by Runrun.it. It’s customizable and intuitive workflow management tools (among other things) can do wonders in making operational management less stressful without compromising quality. This will also help boost productivity significantly. To see if such a tool is right for your organization, go here for a free trial.